Independent Contractors: Prevalence and Implications for Unemployment Insurance Programs
This report presents the results of a study on independent contractors (ICs)
conducted in 1998-99. It begins with a description of ICs in the alternative
workforce and definitions and tests used by federal and state agencies to
classify them. Next, the motivations of employers to use ICs, the motivations
of workers to become ICs, and selected industries where they predominate are
described. Profiles of employees misclassified as independent contractors are
described, and the results of an attempt to determine the extent of misclassification
of employees as ICs and its effects on Unemployment Insurance (UI) trust funds are
presented. Then the efforts of state administrators in dealing with ICs and other
significant workforce issues related to ICs are described. Finally, the report
presents the findings and recommendations of the study.
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